Few tips & tricks on social trading: Interview with FX Junction CEO Matus Bajko

learning to buy the dip

The concept behind social trading has been around for several years. The idea is to utilize the wisdom of the crowd, or of more experienced traders, to derive better trading results.

In social trading, investors participate in a community, sharing ideas, tips, and discussions.

Social trading is so-called because it works on the same lines as a social network.

One area of social trading is the copy trading, offered by several investment platforms. This allows investors to replicate, in close to real time, trades placed on another trader’s account. By doing so you effectively leverage the expertise of experience traders and copy, usually for a fee, their trade on your trading account using your pre-defined parameters.

Before diving into online and social trading, check out these helpful tips: 

  • Choose Your Social Trading Platform
  • Begin with a Demo Account
  • Use Auto Copy feature
  • Auto copy the strategy of more than just one trader
  • Don’t always copy “Best Copiers” and “Highest P&L” traders
  • Avoid new and unverified signal providers
  • Do your own A/B tests
  • Think Long-term Investment, Not Lottery-style Gains
  • Do not underestimate the social features when it comes to investing
  • Social Trading Success: Minimize Risk, Think Long-term

Naturally, you must be flooded with numerous questions regarding social trading. We recently sat down with the CEO of Bel air, s.r.o. – owner of the FX Junction social trading platform – Mr Matus Bajko – who answered a few very relevant questions that haunt every newbie Social Trader:

LR: Do I want to trade socially, what are the benefits?

Matus: There have been several studies by industry papers which have shown that social trading produced above average results for retail Forex traders. Our own experience on FX Junction shows that this is the case – we produce weekly statistics of Live accounts profitability by our members – and they are consistently above 50%. This is a vast improvement on the industry wide profitability figures which are around 20-35% for retail Forex traders. Of course, this is not a scientific method – an argument can be made that some members only well performing accounts in order to showcase their performance – however we genuinely believe that by connecting with other members, discussing strategies and technical indicators, our members produce above [industry] average results.

Beginner traders can also AutoCopy trades from our validated Signal Providers and benefit from their trading experience and trading systems to hopefully produce good results. All this without any need to grant a power of attorney or in any way losing control of their trading accounts and activity.

LR: Which social trading network or platform is right for me

Matus: This is a hard question for me to answer (laugh). Obviously I am partial to FX Junction, however there are other quality social trading networks out there to consider. I would encourage everyone to do their research and choose the network which suits them the best. My advice would be to look at all aspects of the offering, such as any hidden fees, conflicts of interest, flexibility etc. At FX Junction we are the only (to my knowledge) social trading network that is completely open to all regulated MetaTrader brokers without prejudice and without any conflict of interest with our members.

LR: Do I have the patience to be successful?

Matus: The Forex world is certainly a fast-paced one; however I would advise any new traders to be patient and not to expect huge results over time. As we say, consistency is key, and stable consistent returns with low drawdowns and volatility are something to aim for. Hand in hand with this goes the need for sound money and risk management practices with the aim for long term results.

LR: Should I trade without a stop loss?

Matus: No, I would always advise to have an exit strategy in mind for your trade in form of stop losses and take profits. Oftentimes we see accounts that cash quickly small profitable trades but refuse to exit a losing position with desperate desire to recuperate the losses. My advice would be to enter any trade with a predefined exit strategy for take profits but most importantly for
stop losses and sticking to the set goals. It’s better to cut losses early than to see your account blown due to own unwillingness to take a progressively larger loss.

LR: How can I become a millionaire?

Matus: (Laugh). Please tell me if you find a sure fire recipe! In all seriousness, many people do very well in Forex and some even become millionaires. However this is more than likely result of multiple years of experience, carefully studying the market, technical indicators etc, devising great trading strategies and sticking to them. I would beware of any get-rich-quick schemes that are often advertised in Forex. They can work for a short period of time but then almost certainly lead to less than desirable results. And one last note – never, under any circumstances, trade with money which you cannot afford to lose. That way you can ensure good trading results as well as peace of mind that is crucial for the long term perspective.

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